Permanent lease reversion and functus officio liquidator principles determine possession and invalidate post-dissolution conveyance.

A permanent lease under section 105 of the Transfer of Property Act created only a transferable interest, not ownership, and where the lease contained a forfeiture clause the lessee's interest reverted to the lessor on dissolution of the lessee-company rather than escheating to the Government. Once the company was finally dissolved, the ex-liquidator became functus officio and had no authority to execute a sale deed without court intervention, so the deed was invalid. Acceptance of rent before dissolution did not create estoppel, as a mistaken assertion of legal right does not bar a later claim where the parties knew the true legal position. Section 53A did not apply against pre-emptors claiming under an independent title.

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Issues: (i) Whether the leasehold rights under a permanent lease reverted to the lessor on dissolution of the lessee-company or escheated to the Government; (ii) whether the ex-liquidator had authority to execute the sale deed after the company had been dissolved and the liquidation was complete; (iii) whether the appellants were estopped from claiming possession; and (iv) whether section 53A of the Transfer of Property Act, 1882 barred the suit.

Issue (i): Whether the leasehold rights under a permanent lease reverted to the lessor on dissolution of the lessee-company or escheated to the Government.

Analysis: A lease under section 105 of the Transfer of Property Act, 1882 transfers only a right to enjoy the property and not ownership itself. The Court distinguished authorities dealing with hereditary tenures and absolute interests, and held that those decisions did not govern a lease which contained a forfeiture clause. Since the lessee's interest was carved out of the lessor's larger title and could merge back on forfeiture, the same result followed when the lessee-company was dissolved and left no successor.

Conclusion: The leasehold rights reverted to the lessor and did not escheat to the Government.

Issue (ii): Whether the ex-liquidator had authority to execute the sale deed after the company had been dissolved and the liquidation was complete.

Analysis: The Court held that once the company had been finally dissolved and the liquidator had become functus officio, he had no continuing authority to represent the company or to convey its property. The cited English authorities were treated as dealing with different situations, and the provisions of the Indian Companies Act, 1913 were read as showing that, in such circumstances, the proper course was to approach the court, which retained jurisdiction over matters necessary to complete the winding-up.

Conclusion: The ex-liquidator had no authority to execute the sale deed, and the deed was invalid.

Issue (iii): Whether the appellants were estopped from claiming possession.

Analysis: Acceptance of rent before dissolution did not amount to a representation relevant to the later claim arising on dissolution. A mistaken assertion of legal right does not create estoppel, and where both sides know the true legal position there is no estoppel. On the facts, the knowledge of the forfeiture clause negatived any plea of estoppel against the appellants.

Conclusion: The plea of estoppel failed against the appellants.

Issue (iv): Whether section 53A of the Transfer of Property Act, 1882 barred the suit.

Analysis: Section 53A protects a transferee in part performance against the transferor and persons claiming under him. The appellants were pre-emptors and were neither successors-in-interest of the lessee-company nor persons claiming under it. Their title was independent of the alleged transfer, so the statutory bar did not apply.

Conclusion: Section 53A did not bar the suit.

Final Conclusion: The appellants were entitled to possession, and the decree of the courts below was set aside.

Ratio Decidendi: A leasehold interest under a permanent lease with a forfeiture clause reverts to the lessor on dissolution of the lessee if no successor exists, and after final dissolution a functus officio liquidator cannot validly convey the dissolved company's property without the court's intervention.

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